Shemaroo, UTV, Inox may feel the heat of Netflix entry

The entry of the on-demand streaming company can have some repercussions on the listed universe of entertainment cos, say experts.Chiranjivi Chakraborty | ET Online | January 08, 2016, 15:21 IST

Netflix is in India, and experts believe the entry of the famous on-demand streaming company can have some repercussions on the listed universe of entertainment companies.

In a bid to expand its global horizon, Netflix launched its India services on Thursday providing access on phones, tablets, smart TVs, select media player boxes and game consoles.

Who will it impact?

The major beneficiary of Netflix entry would be content owners like Shemaroo, which can gain from the availability of a new distribution platform that can bolster its local content offering.

Shemaroo is one of the key content players in the country and one can expect it to get into further collaboration to increase the outreach of its content. Shares of Shemaroo rose over 8 per cent in Friday’s session.

Movie and multiplex firms such as PVR and Inox Leisure stand to lose from the arrival of Netflix, as more and more viewers prefer to stay at home and watch the latest releases online on demand. Netflix is currently offering more than 100 Bollywood titles.

Shares of PVR lost about a per cent in Friday’s session while those of Inox Leisure traded 0.6 per cent higher. “Over time, we are exploring that in all of our larger markets. India being such a great production hub, this is something we can look at for sure. In terms of Indian content, we're looking at a new wave of Indian independent cinema, that’s really exciting us. What’s really important is, now that we've launched, we get to see what people are engaging with. We'll add more of what people want to see,” said Chitavan Patel, Director, Content Acquisition at Netflix India.

The impact on DTH and cable service providers is likely to be negligent in the near term. The subscription prices of Rs 500-850 for Netflix is thrice that of local cable operators and DTH companies. Also, lack of local content and low broadband penetration will limit Netflix to top metro cities for now.

Expert take:

"We have to see how Netflix is accepted by the Indian audience. It will probably be a few months before we really know how much of an impact they have and how it will affect the existing players in the media and telecom space,” said UR Bhat, MD, Dalton Capital Advisors. “I think early times yet, but still I think it is a place really worth watching closely,” he said.